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Mon 8th Aug 2022 - Update: Two-thirds of UK’s top restaurants in the red, average price of a hotel room rises to record high
Two-thirds of UK’s top restaurants in the red after Brexit, covid and inflation: Debt repayments, staff shortages and rising energy bills have pushed almost two-thirds of the UK’s top 100 restaurants into the red, according to research that reveals the impact of the pandemic, Brexit and the cost of living crisis on the hospitality sector. The Guardian reports that with a recession looming and further increases in energy bills weighing on businesses, a separate report found that £700m of business rates relief remains unpaid with only half of English councils paying out the support funds. A record 64% of the biggest restaurant companies are now making a loss, according to the accountancy firm UHY Hacker Young. Several have suffered heavy losses due to major restructuring programmes undertaken following the pandemic, and because of debt repayments, particularly to landlords. The restaurant sector had expected a recovery in profits following the pandemic, but this has been jeopardised by spiralling food inflation and a fall in consumer confidence caused by interest rate rises. Restaurants have also been hit by labour shortages, forcing them to restrict covers and therefore reducing the amount of revenue they are able to generate, especially at peak times. The company said: “It may be a case of ‘out of the frying pan, into the fire’ for many restaurant groups. They expected, and needed, higher consumer spending as we put covid further behind us, but this spending is now likely to fall when it is needed most.” Meanwhile, only about half of councils in England have started making support payments to businesses from a £1.5bn rates relief package announced by the government in March 2021, a freedom of information request made by the property consultancy Gerald Eve has found. It asked all 309 councils in England how much they had paid out to local businesses. Of the 219 who replied, just 58% have started paying out anything, despite a deadline for concluding relief payments coming in less than two months.

Next edition of Turnover & Profits Blue Book to feature almost 600 companies: The next edition of Propel’s Turnover & Profits Blue Book, which is updated monthly for Premium subscribers, will feature 596 companies. Premium subscribers will receive the latest edition of the Blue Book, which is produced in association with Mapal Group, on Friday, 19 August, at midday. The Blue Book shows the effects of the pandemic, with total losses of £5.7bn being reported by 328 companies. However, a further 268 sector companies are still reporting total profits of £1.3bn. Total turnover of the 596 companies is £30.1bn. The Blue Book, which is updated every month, provides an insight into UK operator turnover and profitability over five years, profit conversion and directors’ earnings. Premium subscribers also receive the New Openings Database, produced in association with StarStock, and the Multi-Site Operators Database, produced in association with Virgate, which are also updated each month. Premium subscribers also now have access to the UK Food and Beverage Franchisor Database, which is an exhaustive guide to the companies offering a food and beverage franchise in the UK and will be updated every two months. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email to upgrade your subscription. Subscribers also receive access to Propel’s library of lockdown videos and Friday Wrap interviews and also have access to a curated video library of the sector’s finest leaders and entrepreneurs, offering their insights on running outstanding businesses in the sector. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out; regular video content and regular exclusive columns from Propel group editor Mark Wingett.

There’s still room at the inn, but at a higher price: The average price of a hotel room has risen to a record high as Britain’s hoteliers push up rates to cash in on strong demand from staycationers and to pass on soaring costs to their guests. The Times reports that according to figures from BNP Paribas Real Estate, ADR, a metric measuring the average daily room rate, climbed to £122.86 in the second quarter of this year, a 70% increase on the first quarter, while “revpar”, or revenue per available room, has increased to an all-time high of £98. “The latest ADR growth figures are a reflection of the current confidence of hotel operators to raise their rates in light of high demand and of the challenging economic backdrop,” Rebecca Shafran, at BNP Paribas Real Estate, said. Sir David Michels, chairman of Michels & Taylor, which runs about 30 regional hotels throughout Britain, said that inflation was “simply bananas”, and added: “Between July and August two of our hotels were taking 10% more turnover but making 10% less profit. For the last 50 years, energy has been 3% to 4% of turnover, but now it’s between 8% and 10%.” Rooney Anand, founder and chairman of the RedCat Group, including Coaching Inn Group, said: “Our premium pub hotels and inns have seen very strong demand this summer, with high levels of occupancy, particularly in hotspots like north Norfolk, the Cotswolds and north Wales. Although people can now travel abroad again, we are still seeing increased booking demand compared with pre-pandemic levels back in 2019 — and we expect this to continue into the autumn.” However, he added that “like many other hospitality businesses, we expect the energy crisis will have an impact both on our own margins and on affordability for our guests unless the current pressures subside”.

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